Slide 1: KordSA Global 2016 H1 Earnings Presentation
Strictly confidential KordSA Global 2016 H1 / Earnings Presentation
Slide 2: Disclaimer
Disclaimer The information and opinions contained in this document have been compiled by Kordsa Global Endüstriyel İplik ve Kord Bezi Sanayi ve Ticaret Anonim Şirketi (the “Company”) from sources believed to be reliable and in good faith, but no representation or warranty, expressed or implied, is m
Slide 3: Market Dynamics: Global Automotive and Tire Market
Market Dynamics Global Automotive Market Global LV Assembly – M Units / Year • Brazil and Russia continue on downward slide, 2015-2020E CAGR: 3,9% while China is profiting from positive YoY 107 comparison, moving it towards 8% growth rate 99 104 88 92 95 • LV sales were up through the first half of
Slide 4: Market Dynamics: Tire Reinforcement Market
Market Dynamics Tire Reinforcement Market (NY6.6) 600 Nylon 6.6 500 Cap-ply demand grows as LV tire market grows 400 2015-2020 CAGR: +2.8% Slower growth in China 300 200 Low demand is expected to continue in mining & large agro tires 100 0 2015 2016E 2017E 2018E 2019E 2020E Supply Demand Sourc
Slide 5: What we have been doing in H1-2016
What we have been doing in H1-2016 1. Operating Excellence a. Continuing Cost Reduction Programs • Raw material diversification and improvement for best yields • Creep capex driving energy & labor efficient production • TPM (total productive maintenence) initiatives at all locations b. Lean Kordsa G
Slide 6: Segmental Progress
Segmental Progress 70% 66% 60% 60% 57% 50% 50% 40% 31% 30% 26% 22% 20% 19% 13% 12% 12% 11% 10% 6% 5% 6% 5% 0% 2013 2014 2015 2016 - H1 Global Players Regional Players Emerging Players Others 6
Slide 7: Regional Revenue Split Progress
Regional Revenue Split Progress 38.6% 36.1% 36.9% 2014 2015 2016 - H1 29.5% 28.0% 28.1% 22.3% 20.8% 17.4% 13.7% 14.5% 14.2% EMEA APAC NA SA 7
Slide 8: 2016 Revenue Split Progress
2016 Revenue Split Progress 120% 100% 8% 4% 6% 18% 21% 80% 21% 60% 40% 74% 75% 66% 20% 0% 2014 2015 2016 TCF NY Yarn Other 8
Slide 9: Strong Focus on R&D
Strong Focus on R&D 52 53 Revenue From New Products (US$m) 41 28 10 2012 2013 2014 2015 2016 9
Slide 10: 2016 H1 Key Financials
2016 H1 Key Financials In MMTL 2015 H1 2016 H1 Change Net Sales 828 960 16% Gross Profit 134 200 49% Gross Profit % 16% 21% +5 pts Operating Profit 69 125 81% Operating Profit % 8% 13% +5 pts EBITDA 101 154 52% EBITDA % 12.2% 16.0% +4 pts Net Income 48 101 111% 10
Slide 11: Operating Profit Evolution 2015 H1 vs 2016 H1
Operating Profit Evolution 2015 H1 vs 2016 H1 (MTL) 16 125 20 1 64 69 (46) 11
Slide 12: 2016 H1 Balance Sheet – selected items
2016 H1 Balance Sheet – selected items In MMTL Dec 31, 2015 Jun 30, 2016 Change Cash and Cash Equivalents 18 40 (22) Account Receivable 297 355 (58) Other Current Assets 109 102 7 Inventories 425 468 (43) Accounts Payable (172) (243) 71 Oth. Curr. Liab. (Excl. Borrowings) (50) (73) 23 WCAP Turnover
Slide 13: 2016 H1 Free Cash Flow
2016 H1 Free Cash Flow June 30, June 30, In MMTL Change 2015 2016 EBIT*(1-t) 58 109 51 Depreciation and Amortization 40 39 1 Change in Working Capital (65) (15) 50 Cash Used in Investing Activities (25) (72) (47) Free Cash Flow** 9 62 53 * FCF: EBIT(1-Tax Rate) + Depreciation & Amortization - Change
Slide 14: Dividend Distribution
Dividend Distribution In MMTL 80 76 70 68 61 60 50 40 35 32 30 20 10 - - 2011 2012 2013 2014 2015 2016 Kordsa distributes all the distributable income subject to Gen Assembly approval. Basis of distribution is the lower of the Turkish solo tax books or consolidated TFRS net income. 14
Slide 15: Guidance
Guidance Jun'2016 Revenue Growth (TRL) %10 - %15 Ebitda Growth (TRL) %20-%30 Raw Material Highly correlated with NY -------> Butadiene, Benzene, Propylene Pet -------> Highly correlated with PTA, MEG Recurring Creep Capex 23 M$ *EBITDA Calculation = Operating Profit - [Dep&Amort] - [A]* - [B]** [A]*
Slide 16: Appendix
APPENDIX KORDOOQc.08AL ERNE OER
Slide 17: NY Raw Material Trend
20 40 60 80 0 100 120 140 160 Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 RM Price Drivers BZ Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15 Apr-15 BD May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 PP NY Raw Material Trend Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 OIL May-16 Jun-16 Jul-16 A
Slide 18: Polyester Raw Material Trend, PTA and MEG
50 60 70 80 90 100 110 50 70 80 90 60 100 110 120 Jan-14 Jan-14 Feb-14 Feb-14 Mar-14 Mar-14 Apr-14 Apr-14 May-14 May-14 Jun-14 Jun-14 Jul-14 Jul-14 Aug-14 Aug-14 Sep-14 Sep-14 RM Price Drivers Oct-14 Oct-14 Nov-14 Nov-14 Dec-14 Dec-14 MEG CFR AP Contract $/ton PTA NEA CFR Contract $/ton Jan-15 Jan-1